Cloud kitchens- The modern-day comrade of food delivery apps

“Delivery is the hottest word out there in the food scene, and every food business needs to figure out how to adapt to it. Amidst this, dark kitchens have been on a meteoric rise”

Cloud. Virtual. Dark. Host. Ghost.

Around all these words, the restaurant industry shines bright and looks highly promising. And it is with them functioning physically at the backdrop, that instant food orders are getting accepted and its quick deliveries are becoming a reality. As enormously as the love for food is growing, so is the admiration for ghost kitchens. They have just been on a meteoric rise, and theirs could be a $1 trillion global market by the year 2030, as reported by Euromonitor. The firm also predicts that cheaper, faster and more reliable delivery could help this segment capture 50% of drive-thru service ($75 billion), 50% of takeaway foodservice ($250 billion), 35% of ready meals ($40 billion), 30% of packaged cooking ingredients ($100 billion), 25% of dine-in foodservice ($450 billion), and 15% of packaged snacks ($125 billion).

And why not? Rightly so, behind the successful fulfilment of a major portion of food deliveries made around the world on a daily basis, lie the cloud kitchens. Call them virtual, dark, host or ghost kitchens, they are just getting better by the day and not just the food fraternity but the entire world is in awe of the phenomenon ghost kitchens are turning out to be. With food delivery services picking up pace and catering growing faster than the overall restaurant industry, setting up virtual kitchens is becoming a more common solution to deal with additional orders, some of which are coming in last minute.

Today’s world is just famished. Talk about food deliveries, and the gourmet customers and the so called ‘foodies’ of the modern world will not miss a chance to pounce and grab the best deals. The world is actually getting shrunk to two things- food and food deliveries. We can all agree on the fact that food delivery services have made people’s lives easier to the core. Whether you don’t have time to cook or just want to relax and eat something tasty, ordering food online just comes in pretty handy. Therefore, there should not be an element of surprise as to why cloud kitchens are becoming immensely popular these days.

What are cloud kitchens?

To make you familiar with this term that is garnering attention from all corners of the globe, cloud kitchens or ghost kitchens are a restaurant without a traditional dining room or counter for guests. It simply exists to fulfil online orders for delivery. Cloud kitchens can be set up in more affordable locations than those typically used for restaurants. They are also often known as shadow kitchens.

Put simply, they are a commercial kitchen space exclusively designed and primarily built for food delivery and takeout. As there is no storefront for dine-in or walk-ins, customers generally do not know where the food is cooked at, therefore the name "dark kitchen" or "shadow kitchen". Ghost kitchens generally sell food only through third-party delivery apps or cooperate with regular restaurants.

Cloud kitchens and contemporary customer behavior

With the food delivery industry poised to grow roughly by 30 percent by the year 2026, modern day customers are just about enjoying every bit of it. The consumer preferences have shifted. Attribute it to the quarantined times of the pandemic or they themselves choosing to stay in the luxury of their home post that period, food deliveries are just getting dearer for them. It is worthwhile to notice that the contemporary customers are wanting food delivered to them without any hassles. They have started to prioritise the most convenient method without compromising quality - and what’s more convenient than getting food delivered to your doorstep?

The customers are just curiously hunting for food delivery software and apps that can have the food delivered to them at the speed of light. And there a lot of them with whom the restaurants and virtual kitchens have joined hands. Such food delivery apps are no less than their comrades, that are not just meeting customer demands brilliantly, but have also brought respite to many culinary businesses.

Cloud kitchens and prudent food businesses of today

As it stands, countless restaurants are pivoting towards the food delivery scene. Though for many, it’s the necessary step in order to gain back the lost liquidity or avoid bankruptcy, but for several prudent and futuristic businesses, it’s light at the end of the tunnel and nothing less than a pathway to huge expansion.

Considering the present scenario and growing craze of food deliveries among consumers of all sorts and backgrounds, futuristic restaurants and culinary businesses should not keep quiet or stay calm. These are the times and circumstances that need attention and commitment of resources towards a growing cause- popularly known as a cloud kitchen. Promptly getting along with establishing a dark kitchen, is surely going to put your business above your rivals’.

With low upfront and operational costs involved, culinary businesses can better test their potentially new and innovative ideas with little risk- all while pumping out more orders than ever before. All in all, with the below given mind boggling statistics we cannot, rather should not, question the growing popularity of cloud kitchens.

Statistical insights about ghost cum cloud kitchens

• Ghost kitchens are projected to hold a 50% share of the world’s drive-thru and takeaway foodservice markets by the end of 2030.

• There are around 1,500 ghost kitchens in the US.

• The start-up cost for a ghost kitchen is $20,000 to $30,000.

• According to Statista’s ghost kitchen industry report, the global ghost kitchen market is projected to be worth $71.4 billion by 2027.

• Data from Euromonitor reveals that ghost kitchens could be a $1 trillion market by the year 2030.

• According to a report published in Market Man, delivery orders surged by 67% in March 2020, when the coronavirus pandemic started. And ghost kitchens witnessed a tremendous increase in profits. In fact, ghost kitchen trends point out that the delivery orders increased almost 70% during that time.

• Statista, in one of its reports reveals, that China has the largest number of ghost kitchens with an approximation of 7500 kitchens.

• India has the second largest number of ghost kitchens- roughly over 3500, firmly placed after China.

• Some statistics reveal that 47% of the Chinese survey respondents had a quite positive experience ordering food from a ghost kitchen or virtual restaurant.

• A report in Statista maintains that even though some virtual kitchens have their own delivery services, most of them rely on third party food delivery services. The number of those who use smartphone food delivery apps in the US is projected to reach 53.9 million by 2023.

• As many ghost kitchen trends for 2021 and 2022 reveal, more than 50% of consumers have absolutely no problem ordering from a restaurant with no physical storefront.

• PitchBook through some statistics reveals that there are 125 leading companies in the ghost kitchen industry. They have 510 investors and have closed around 306 deals. Some of the most famous ghost kitchens are DoorDash, Deliveroo, and Rebel Foods.

• A UK start-up called Karma Kitchen is the most prominent cloud kitchen in Europe, and it’s one of the largest ghost kitchen companies. Statista maintains that it raised over €300 million in only one round of funding in July 2020. Other well-known European companies to follow are Keatz and Frichti.

• Ghost kitchen trends reveal that those who ordered from DoorDash spent the most in the fourth quarter of 2021.

Wrapping up

Dark kitchens are getting popular. And food businesses and restaurants, by virtue of having efficient food delivery software and apps are ruling the roost. This is obvious so much so that increasing number of chains are turning to virtual restaurants with the hope that they will be able to give their otherwise floundering or stagnating businesses the much-needed uplift. So, there is no turning a blind eye to the prospects hovering around businesses with the functioning of virtual kitchens at the centre.

To put one interesting fact in front, American fast food restaurant chains like Dog Haus and Chick-fil-A are rolling out units without store fronts or dining areas to grow their off-premise sales without overburdening in-store operations.

As mentioned in Market Man, the growth of ghost kitchens and popularity of food delivery services could lead to full automation of the production of various menu items and dishes during the next five to ten years.

Dine-in restaurants will always exist, but their place as the standard restaurant model is being challenged. Cloud kitchens are a product of the sharing economy, and recent trends are highly suggestive of the fact that they are here to stay.

As food deliveries gain traction in the coming days and more and more delivery-focused kitchen spaces open up across the globe to cater to the increasing demand for convenient and quality food, food delivery will become the norm. Opening a cloud kitchen today allows you to become an experienced and established player in the market long before competition intensifies.